Jargons Used in Technical Analysis and What are They?

 

One of the most important information all investors would like to know is the prices trend. Prices have a propensity to move directional, forming a trend and trends likely to persist over time.

 

Peaks and troughs are pattern that are developed by the price movement. Trends are determined by a series of these patterns.

 

How can we determine the trendline has been broken or not? Witness the breakdown and then replacement of the peaks and troughs.

But be careful you do not make the mistake of using a time frame that is too short. Peaks and troughs are developed over weeks and months of price action, not hours and days of trading.

 

Daily candlestick is used in the chart for illustration. Each bar represents one day of price movement.

 

Below is the chart showing the uptrend.

 

Below is the chart showing the downtrend.

 

Below is the chart showing the sideways (consolidation).

 

Suzane